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of <h1>Supreme Court increases compensation to Rs. 10 lakh in cheque dishonour case under Section 138 NI Act</h1> SC modified sentence in dishonour of cheque case under Section 138 NI Act. Court expressed concern over inadequate 'flea-bite' sentences imposed by lower ... Dishonour of Cheque - conviction of accused - adequate sentence imposed or not - HELD THAT:- In Suganthi Suresh Kumar v. Jagdeeshan, [2002 (1) TMI 1284 - SUPREME COURT], this Court was considering the propriety of inadequate sentence imposed by courts on the accused charged under Section 138 of the NI Act. This Court expressed displeasure about courts imposing a flea-bite sentence on the accused. Again, in R. Vijayan v. Baby and Anr. [2012 (6) TMI 519 - SUPREME COURT] this Court considered the same question. This Court also examined the need to award compensation to the complainant. This Court was of the opinion that the traditional view that the criminal proceedings are for imposing punishment on the accused, either punishment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a victim in the real sense, but is a well-to-do financier or financing institution, gives rise to difficulties and complications. This Court further observed that in those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired - This Court further observed that the direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. The impugned order needs to be modified - the Respondent-accused sentenced to undergo simple imprisonment for a period of six months for offence under Section 138 of the NI Act - Considering the fact that the cheque amount is Rs. 6,19,488/-, the Respondent-accused is directed to pay compensation of Rs. 10,00,000/- to the Appellant. In default of payment of compensation, the Respondent-accused will have to undergo simple imprisonment for a period of six months. Appeal disposed off. Issues:Cheque bounce case - adequacy of punishment and compensationAnalysis:The case involved a cheque bounce incident where the Respondent issued a cheque to the Appellant, which bounced upon presentation. The trial court convicted the Respondent under Section 138 of the Negotiable Instruments Act and sentenced him to six months imprisonment and a fine. The Additional District Judge confirmed the conviction but reduced the sentence to three weeks. The High Court modified the sentence, directing the Respondent to pay compensation of ` 2,00,000/- or undergo two months imprisonment. The Appellant appealed, seeking higher punishment and compensation.In the case of Suganthi Suresh Kumar v. Jagdeeshan, the Supreme Court expressed dissatisfaction with inadequate sentences in cheque bounce cases, emphasizing the need for appropriate punishment to uphold the legislative intent behind Section 138. The court highlighted that non-payment of the cheque amount should result in a sentence that aligns with the purpose of the law, preventing accused from taking the offense lightly.Similarly, in R. Vijayan v. Baby and Anr., the court discussed the necessity of compensating the complainant in cheque bounce cases. It emphasized that courts should consider directing payment of compensation, up to twice the cheque amount, to reimburse the loss suffered by the complainant. The court stressed the importance of practical and realistic compensation, including interest on the cheque amount at a reasonable rate.In light of these judgments, the Supreme Court modified the impugned order, sentencing the Respondent to six months imprisonment and directing him to pay compensation of ` 10,00,000/- to the Appellant. Failure to pay the compensation would result in six months imprisonment. The court ordered the immediate arrest of the Respondent, who had not yet surrendered, upon receipt of the judgment. The court appreciated the assistance of the amicus curiae and disposed of the appeal accordingly.
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